Financial reward or pay is a core component of employee motivation. Eminent thinkers such as Maslow, McGregor, Tolman, Locke, Pavlov, etc have contributed to our understanding of workplace motivation. Based on a synthesis of their theories, we are in a position to ascertain how key a role pay plays in motivating employees and enhancing their performance. The rest of this essay will attempt to do the same.
Motivation theory is not a single monolithic framework of analysis, but rather a product of contributions from various fields/disciplines within humanities. The intellectuals mentioned above have offered their theories from the perspective of their respective fields/disciplines. For example, Maslow, McGregor, Alderfer, McClelland have emphasized the physiological basis of employee motivation, whereas scientists such as Locke, Vroom, Kelly and Tolman have presented the cognitive basis of motivation. Social/behaviourist theories of motivation comprise the third school of thought, where seminal contributions were made by Pavlov, Taylor, Thorndike, Skinner, etc. An understanding of psychological motivations of pay is achieved by gleaning relevant points from these three schools of thought.
The behaviourist theory lays emphasis on the “effect of learning and reinforcement, and as a result the behaviourist theory of motivation is closely connected to the psychological theories of learning and reinforcement.” (Hume, 1995) Abraham H. Maslow’s ground breaking thesis the Hierarchy of Needs gives insight into human motivation (in the workplace or elsewhere). He notes that “all individuals have a set of human needs which are prioritized on an ascending scale, primary needs dealing with physiology and safety, and secondary needs dealing with the psychological aspects of human existence, etc. These needs in ascending order are: physiological, safety, social/love, esteem, and self actualization.” (Hume, 1995) Firstly, pay helps satisfy primary needs of physiological needs of safety and security by allowing for housing, clothing expenditures. Secondly, it satisfies the social/psychological need by bestowing a social status to the individual. Though this secondary need is subjective and less tangible, it is a powerful source of motivation nevertheless.
Coming to the Cognitive theories of motivation, the most important contribution comes from American psychologist Edward C. Tolman, who articulated his Expectancy Theory of Motivation. Here, he suggests that
“that the behaviour of individuals is not based on needs or drives but is determined by the presence of goals and the probability or expectancy that their behaviour will lead to the attainment or achievement of these goals…therefore, people are not driven by deprivations and needs but rather are guided to important goals by perceptions and cognitions.” (Hume, 1995)
Hence it is often the case that pay is a cognitively constructed goal, made possible by the viability of its achievement.
Contribution to motivation theory from social/behaviourist theories comes from Edward L. Thorndike’s Law of Effect. Thorndike formulates that the behaviour of animals (and also humans) is “directly affected by the consequence of such action”. (Hume, 1995) More specifically, those behaviours that are followed by rewards (including pay) are likely to be enacted again. Similarly, those behaviours that lead to punishments tended to subside over time. Hence, rewards such as pay have a positive effect, encouraging employee performance. The Law of Effect places high emphasis on “the concept of reinforcement – maintaining specific forms of behaviour by reinforcing consequences, be they positive or negative. It is this concept of reinforcement which remains central to the behaviourist theory of motivation.” (Hume, 1995) The Law of Effect is associated with the stimulus-response concept, which was further expanded by psychologists Ivan P. Pavlov and Burrhus F. Skinner.